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Whether to Buy or Trade Cryptocurrencies in 2019?
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Whether to Buy or Trade Cryptocurrencies in 2019?
An overview of steps you can Take to Invest in cryptocurrencies in 2019. We will discuss two possible investment options, Buying and Selling and Trading Cryptocurrencies

If you are considering investing in cryptocurrencies in 2019, decide whether buying or trading will suit your needs best. In this article, we shall analyst buying crypto and trading crypto to guide you on how to make the maximum profits on cryptocurrencies in 2019.

Cryptocurrencies are interesting to investors given their chunky returns. The volatility in crypto also offers lots of opportunities for those interested in trading price movements. Should you wish to start your crypto journey, here are the steps you can take.

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Decide Whether You Want To Buy Or Trade?

You can buy cryptocurrencies from an exchange and hold it in your private wallet waiting for prices to increase. Or you can trade cryptocurrencies by speculating on their prices without ever buying them, using derivatives trading instruments called cryptocurrency CFDs. When buying a unit of a cryptocurrency, you pay in full the price of the asset.

Meanwhile, when trading, you would only put up a small proportion of your total position size. This allows you to take a leveraged position on the price, gaining a greater exposure than might otherwise be available with your investment amount. This approach is cheap in that investors do not have deposits or withdrawal fees to access the currency.

Additionally, there are a number of tax advantages to trading over buying. You wouldn’t mind about paying capital gains on the profits of trading cryptocurrencies. However, all profits accrued from buying and selling cryptocurrencies are taxed. Traders are warned of high risks of losses associated with trading cryptocurrencies especially when using the wrong strategy.

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  • Sign Up with a Cryptocurrency Exchange

To buy and sell cryptocurrencies, you need to create an exchange account and store the cryptocurrency in your digital wallet. Exchanges have a dashboard which shows the number of transactions you can conduct and the profits you made from them. Generally speaking, buying and selling cryptocurrency carry less risk compared to trading cryptocurrencies.

If you prefer trading cryptocurrency to buy and sell, you’d need a brokerage account, rather than accessing the underlying exchange directly. In this arrangement, the broker is exposed to the underlying market on your behalf. This up such accounts are usually easier and faster.

Decide Which Currencies You Want To Buy And Sell?

Another important step to take when investing in cryptocurrencies is the decision about which cryptocurrency to invest in. technically you may not be able to trade all the 1,500 cryptocurrencies on the market. However, you should be able to trade all the major currencies including bitcoinbitcoin cashEthereumRipple XRP, and Litecoin.

With new tokens coming up every day, it is vital to trade only those currencies you are well versed with. This will reduce the amount of time you will spend to become an expert in the price movements of the currency.

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  • Decide on your trading strategy

The profit determines factor in trading is the strategy you use while trading. New traders should spend ample amount of time to research the best strategies that suit their portfolios before jumping on to start trading. Trading involves a lot of losses. It is the strategy you use that can determine if you remain in losses or make any profits from trading.

  • Apply your strategy by placing trades

After deciding and testing a particular trading strategy it is time to apply your strategy by placing real monetary valued trades. All trading strategies should be designed such that your chances of depleting your investment in one trade is null. Cryptocurrencies are volatile and running large open positions is very risky. Start with small amounts and test your strategy in demo accounts.

by Jakob Okonya

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